RAJARAM SHRIRAM SAMANT,THANE vs. ACIT, CIRCLE 3, THANE

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & HON’BLE SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.1651/Mum/2026 (Assessment Year: 2016-17)

Rajaram Shriram Samant Vs. ACIT, Circle- 3 2602, Royee, Rodas Enclave, Quereshi Mansion, Hiranandani Estate, GB Gopal Krishna Gokhale Road, Chitalsar Manpada Marg, Naupada, Thane B.O. Thane, Thane West, Thane - 400602 - 400607 PAN/GIR No. BEWPS3695N (Applicant) (Respondent) Assesseeby Shri Aditya Ramchandran Revenue by Shri Annavaram Kosuri (SR. AR.) Date of Hearing 11.05.2026 Date of Pronouncement 09.06.2026 आदेश / ORDER PER SANDEEP GOSAIN, JM: The present appeal has been filed by the assessee challenging the impugned order 23.12.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2016-17. The following grounds are reproduced below: “Ground No.1 On the facts and circumstances of the case and in law, the CIT (A) ought to have considered the notice issued under Section 148 on 26-7-2022 as invalid and bad in law in view of the fact that it was issued after the expiry of the time period as extended by the provisions of Taxation and Other

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Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 after excluding the period referred to in third proviso to Section 149 as explained by the Supreme Court in the case of UOI v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC). As a result, the said notice as well as the entire assessment proceeding ought to have been declared as null and void. Ground No. 2 On the facts and circumstances of the case and in law, the learned Assessing Officer has erred in issuing the order under Section 148A(d) and the notice under Section 148 after obtaining the approval of the approval of PCIT- 1, Thane which was not the correct specified authority as per Section 151 who should have approved it when three years have already elapsed from the end of the relevant assessment year. Ground No. 3 On the facts and circumstances of the case and in law, the DCIT, Circle-3, Thane has erred in passing the order u/s. 148A(d) and also issuing the notice u/s. 148 without appreciating that he was not having the jurisdiction for the same in view of Section 151A and the notification issued thereunder notifying e-Assessment of Income Escaping Assessment Scheme, 2022 and, thereby, rendering the said order and the notice as well as the entire assessment proceeding as null and void. Ground No. 4 On the facts and circumstances of the case and in law, notice issued u/s 148 dated 26/07/2022 is required to be declared as null and void as it suffers from the jurisdictional defect of not complying with the requirements of Circular No. 19 of 2019 dated 14th August, 2019 issued by the CBDT. Ground No. 5 On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in setting aside the assessment and referring the case back to the Assessing Officer for making a fresh assessment by invoking the proviso to Section 251(1)(a) of the Act without appreciating that the assessment proceeding was suffering from several jurisdictional defects which were fatal due to which the assessment was required to be quashed in its entirety. Ground No. 6 On the facts and circumstances of the case and in law, the order under section 148A(b) of the Act and the subsequent notice under section 148 of the Act is bad in law in so far as the appellant has not been provided with the relevant materials on the basis of which notice under section 148A(b) of the Act was issued, thereby grossly violating the directions of the Honble Supreme Court as laid down in UOI vs. Ashish Agrawal CA No. 3005 of 2022.

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Ground No. 7 On the facts and circumstances of the case and in law, the CIT(A) ought to have granted the exemption under section 10(35) in respect of dividend amounting to Rs.3,85,49,312 received from JM Balanced Fund - Quarterly dividend. Ground No. 8 On the facts and circumstances of the case and in law, the CIT(A) ought to have deleted the disallowance of the Short-Term Capital Loss incurred from Purchase and Sale of JM Balanced Fund - Quarterly dividend to the extent of dividend earned amounting to Rs.3,85,49,312 which was alleged by the Ld. Assessing Officer to be fictitious and sham transactions. Ground No. 9 On the facts and circumstances of the case and in law, the CIT(A) ought to have deleted all the disallowances / additions made by the Ld. Assessing Officer on the ground that the opportunity of cross examination of the person on whose statement he had relied upon. Ground No. 10 On the facts and circumstances of the case and in law, without prejudice to the above grounds, the CIT(A) ought to have disapproved the action of the Ld. Assessing Officer in adding an amount of Rs.3,85,49,312 to the total income of the appellant under the head Income from other source instead of disallowing set off of short-term capital loss as claimed by the appellant to that extent. The Appellant craves leave to add, alter, amend, vary and/or withdraw any or all the above grounds of appeal.”

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matter back to the file of Assessing Officer. We noticed that assessee has raised ground No. 2 specifically challenging the jurisdiction, thereby challenging the jurisdiction of the sanctioning authority while passing order u/s 148A(d) of the Income Tax Act. In this regard, it was submitted that assessee has challenged the sanction accorded u/s 151 of the Act as the order u/s 148A(d) and the notice u/s 148 of the Act have been accorded sanction by Ld. DCIT-1 Thane, which was not the correct specified authority as per Section 151 of the Act as more than three years had elapsed from the end of the relevant assessment year. In this regard our attention has been drawn to Page no. 6 to 14 of the Paper Book which contains order under Section 148A(d) of the Act dated 26.07.2022 and notice u/s 148 dated 26.07.2022.

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upon the decision of the jurisdictional High Court in the case of Ramesh Bachulal Mehta V. Income Tax Officer Ward-27(3)(1) Mumbai & Ors. wherein jurisdictional High Court while dealing with the same A.Y. has passed an elaborate order and the operative portion of the order of the jurisdictional High Court in the case of Ramesh Bachulal Mehta (supra) is reproduced herein below; “5. The Petitioner has contended that in the present case, the order under section 148A(d) dated 13.07.2022 was passed beyond three years from the end of the relevant Assessment Year 2016-17. Consequently, according to the provisions of section 151(ii), when more than three years have elapsed from the end of the relevant assessment year, the specified authority for obtaining the approval was either the Principal Chief Commissioner (PCCIT) or Principal Director General (PDGIT), or where there is no PCCIT or PDGIT, the Chief Commissioner (CCIT) or the Director General (DGIT). However, in paragraph 7 of the order dated 13.07.2022 passed under section 148A(d), Respondent No.1 has stated that before passing the said order, prior approval of Respondent No.2 i.e. the Principal Commissioner of Income Tax-27, Mumbai, was obtained and the said order was passed thereafter. This aspect remains uncontroverted by the Respondents. 6. In these facts, the limited point to be examined is whether the order dated 13.07.2022 passed under section 148A(d) for the Assessment Year 2016-17 after obtaining approval of Respondent No.2 [i.e. the PCIT- 27, Mumbai], was in accordance with the provisions of section 151. 7. The Petitioner has drawn our attention to the decision of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC)/[2024] 301 Taxman 238 (SC)/[2024] 469 ITR 46 (SC) and we deem it appropriate to refer to the said judgment where the Hon'ble Supreme Court has, while dealing with the issue of approval from the specified authority in terms of Section 151 of the Act, made the following observations: “iii. Sanction of the specified authority 73. Section 151 imposes a check upon the power of the Revenue to reopen assessments. The provision imposes a responsibility on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under

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section 148. The purpose behind this procedural check is to save the assesses from harassment resulting from the mechanical reopening of assessments Sri krishna (P.) Ltd. v. ITO [1996] 87 Taxman 315/221 ITR 538 (SC)/[1996] 9 SCC 534. A table representing the prescription under the old and new regime is set out below: Regime Time limits Specified authority Section 151(2) of the old regime Before expiry of four years from the Joint Commissioner end of the relevant assessment year Section151 (1) of the old regime After expiry of four years from the Principal Chief end of the relevant assessment year Commissioner or Chief Commissioner of Principal Commissioner of Commissioner Section 151(i) of the new Three years or less than three years Principal Commissioner regime from the end of the relevant or Principal Director or assessment year Commissioner or Director Section 151(ii) of the new More than three years have elapsed Principal Chief regime from the end of the relevant Commissioner or assessment year Principal Director General or Chief Commissioner or Director General

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the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director: and (b) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 76. Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under section 148 to issue a reassessment notice. Section 151 of the new regime does not prescribe a time limit within which a specified authority has to grant sanction. Rather, it links up the time limits with the jurisdiction of the authority to grant sanction. Section 151(ii) of the new regime prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non-compliance by the assessing officer with the strict time limits prescribed under section 151 affects their jurisdiction to issue a notice under section 148. 77. Parliament enacted TOLA to ensure that the interests of the Revenue are not defeated because the assessing officer could not comply with the pre conditions due to the difficulties that arose during the COVID-19 pandemic. Section 3(1) of TOLA relaxes the time limit for compliance with actions that fall for completion from 20th March 2020 to 31st March 2021. TOLA will accordingly extend the time limit for the grant of sanction by the authority specified under section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20th March 2020 and 31st March 2021, then the specified authority under section 151(i) has an extended time till 30th June 2021 to grant approval. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20th March 2020 and 31st March 2021, then the specified authority under section 151(2) has time till 31st March 2021 to grant approval. The time limit for Section 151 of the old regime expires on 31 March 2021 because the new regime comes into effect on 1st April 2021. 78. For example, the three year time limit for assessment year 2017- 2018 falls for completion on 31st March 2021. It falls during the time period of 20th March 2020 and 31st March 2021, contemplated under section 3(1) of TOLA. Resultantly, the authority specified under section 151(i) of the new regime can grant sanction till 30th June 2021. 79. Under Finance Act 2021, the assessing officer was required to obtain prior approval or sanction of the specified authorities at four stages: a. Section 148A(a)- to conduct any enquiry, if required, with respect to the information which suggests that the income chargeable to tax has escaped assessment; b. Section 148A(b)- to provide an opportunity of hearing to the assessee by serving upon them a show cause notice as to why a

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notice under section 148 should not be issued based on the information that suggests that income chargeable to tax has escaped assessment. It must be noted that this requirement has been deleted by the Finance Act 2022; c. Section 148A(d)- to pass an order deciding whether or not it is a fit case for issuing a notice under section 148; and d. Section 148-to issue a reassessment notice. 80. In Ashish Agarwal (supra), this Court directed that Section 148 notices which were challenged before various High Courts "shall be deemed to have been issued under section 148-A of the Income-tax Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b)." Further, this Court dispensed with the requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a). Under Section 148A(b), an assessing officer was required to obtain prior approval from the specified authority before issuing a show cause notice. When this Court deemed the Section 148 notices under the old regime as Section 148A(b) notices under the new regime, it impliedly waived the requirement of obtaining prior approval from the specified authorities under section 151 for Section 148A(b). It is well established that this Court while exercising its jurisdiction under Article 142, is not bound by the procedural requirements of law High Court Bar Association v. State of UP [2024] 160 taxmann.com 32/299 Taxman 21 (SC)/[2024] 6 SCC 267, 81. This Court in Ashish Agarwal (supra) directed the assessing officers to "pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned." Further, it directed the assessing officers to issue a notice under Section 148 of the new regime "after following the procedure as required under section 148-A." Although this Court waived off the requirement of obtaining prior approval under section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was required to obtain prior approval of the specified authority according to Section 151 of the new regime before passing an order under section 148A(d) or issuing a notice under section 148. These notices ought to have been issued following the time limits specified under section 151 of the new regime read with TOLA, where applicable." 8. On bare reading of the above extract of the judgment of Hon'ble Supreme Court in the case of Rajeev Bansal (supra), we find that the Hon'ble Supreme Court had clarified as under: 8.1 Under the substituted provisions of re-assessment as introduced by the Finance Act, 2021, the Assessing Officer is required to obtain prior approval or sanction of the 'Specified Authority' at four stages: (i) at first stage under Section 148A(a); (ii) at second stage under Section 148A(b);

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(iii) at third stage under Section 148A(d); and (iv) at fourth stage under Section 148. In the case of Ashish Agarwal (supra) the Hon'ble Supreme Court waived off the requirement of obtaining prior approval under section 148A(a) and Section 148A(b) of the Act only. Therefore, the Assessing Officer was required to obtain prior approval of the 'Specified Authority' according to Section 151 of the new regime before passing an order under Section 148A(d) or for issuing a notice under Section 148. 8.2 Under new regime, if income escaping assessment is more than Rupees 50 lakhs, a reassessment notice could be issued after the expiry of three years from the end of the relevant assessment year only after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 8.3 Section 151(ii) of the substituted provisions prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non-compliance with the provisions of section 151 vitiates the jurisdiction of the Assessing Officer to issue a notice under section 148. 8.4 Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under section 148 to issue a reassessment notice. 9. In the present case the period of three years from the end of the Assessment Year 2016-17 fell for completion on 31 March 2020. Since the expiry date fell during the time period of 20th March 2020 and 31st March 2021 contemplated under Section 3(1) of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short "TOLA"), the authority specified under Section 151(i) of the new regime could have granted sanction till 30th June 2021. On perusal of the order, dated 13.07.2022, passed under Section 148A(d) of the Act, we find that the aforesaid order was passed after taking approval from Principal Commissioner of Income Tax (Respondent No.2). Since the aforesaid order was passed after the expiry of three years from the end of the Assessment Year 2016-17, as per the substituted provisions of re-assessment, the authority specified under Section 151(ii) of the Act (i.e. Principal Chief Commissioner or Chief Commissioner) was required to grant approval. Accordingly, we conclude that in the present case the approval has been obtained from the authority specified under Section 151(i) of the new regime instead of the authority specified under Section 151(ii) of the new regime. 10. The Hon'ble Supreme Court in the above case has drawn an illustration in paragraph 78 of it's order in the context of Assessment Year 2017-18, wherein it is categorically held that the authority specified under section 151(i) can accord sanction only upto 30.06.2021. This illustration makes it absolutely clear that when the period of three years from end of relevant Assessment Year expired between 20.03.2020 and 31.03.2021, the extension by virtue of TOLA

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was upto 30.06.2021 and not beyond. Thus, it can be said that the period of three years from the end of the relevant Assessment Year (here AY 2016-17) expired on 30.06.2021, whereas the Respondent No.1, despite passing the order on 13.07.2022 in respect of Assessment Year 2016-17, has obtained approval of Respondent No.2 who is not the authority as prescribed under section 151(ii). 11. Non-compliance by Respondent No.1 with the provisions contained in Section 148A(d) read with Section 151(ii) vitiates the jurisdiction of the Respondent No. 1 to issue a notice under Section 148 of the Act. 12. We are clearly of the view that the present matter stands covered by the decision of Hon'ble Supreme Court in the case of UPI vs. Rajeev Bansal (supra). We accordingly hold that the order dated 13.07.2022 passed under Section 148A(d) of the Act and the consequential notice issued under section 148 dated 15.07.2022 are bad in law for being violative of the provisions of Section 151(ii) of the Act. Hence they are required to be quashed and set aside. 13. We, accordingly, set aside the impugned order dated 13.07.2022 passed under section 148A(d), the Notice issued under Section 148 and all other proceedings/orders emanating therefrom and allow the writ Petition in terms of Prayer Clause (a) of the petition. 14. Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof. No order as to costs.”

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and consequential proceedings, therefore, other grounds raised by the assessee becomes infructuous and needs no adjudication in view of our decision of Ground No. 2.

Order pronounced in the open court on 09.06.2026

Sd/- Sd/- (BIJAYANANDA PRUSETH) (SANDEEP GOSAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 09/06/2026 KK, PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलार्थी / The Appellant 1. प्रत्यर्थी / The Respondent. 2. संबंधित आयकर आयुक्त / The CIT(A) 3. 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधिधि, आयकर अपीलीय अधिकरण,मुम्बई/ DR, ITAT, Mumbai 5. 6. गार्ड फाईल / Guard file. आदेशानुसार/BY ORDER, सत्याधपत प्रधत //True Copy//

उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai